Between
2009 and 2013, U.S. biopharma eliminated at least
156,000 American jobs,
including scaling back R&D departments, slashing sales teams, and
eliminating redundancies in post-merger workforces.
Since
then, the industry has continued to slice and dice sections of
its employment base, particularly in the wake of a record level
of M&A activity
in the sector (there were 182 biopharma deals totaling $212 billion in 2014
alone, and 2015 looks on pace to beat that record). The Wall Street Journal points out that Pfizer, for example, has a
habit of snapping up big companies and then chopping up jobs as it
realizes synergies from those deals.
1) M&As: Harbingers of the pink slip
This
shouldn't be particularly surprising, according to Dan Mendelson, president and
CEO of healthcare analytics firm Avalere Health. "[W]henever there's a
consolidation, there are efficiencies that are created by the fact that there
are two heads of managed markets, there's two heads of government relations,
two heads of commercial," he told BioPharma Dive in a telephone
interview.
"So
you end up being able to achieve cost savings as a result of that duplication.
And that is a natural consequence of mergers because that's the way that they
achieve efficiencies. And good or bad, that's what they end up doing," he
said.
With
the pace of biopharma M&A activity on the rise, the number of these
merger-related layoffs will continue to grow. To cite just one major recent
example, biotech giant Amgen announced in March that it would cut about 40%
of the remaining workforce (about 300 employees) at subsidiary Onyx Pharmaceuticals and
shutter one of its facilities in south San Francisco. All told, Amgen
announced approximately 4,000 layoffs in 2014.
But
while it's obvious that a merger or acquisition portends job cuts, what's less
obvious is where, exactly, those layoffs might take place at a given company.
And some firms use the advent of an M&A to "rightsize" certain
parts of its workforce.